VocabularyVocabulary

Sole-Proprietorship- A business owned by a single person.Sole-Proprietorship- A business owned by a single person. Partnership- A business owned by 2 or more people.Partnership- A business owned by 2 or more people. Corporation- A business that is owned by its stockholders Corporation- A business that is owned by its stockholders

(people who buy company stock).(people who buy company stock). Labor Union- Group of workers that unite to attempt to get Labor Union- Group of workers that unite to attempt to get

better pay and working conditions.better pay and working conditions. Arbitration- Method of conflict resolution where a 3Arbitration- Method of conflict resolution where a 3rdrd party party

listens to each side and then makes a decision.listens to each side and then makes a decision. Lockout- When employees are prevented from attending Lockout- When employees are prevented from attending

work. (NFL)work. (NFL)

reviewreview Why is it that Monopolies are considered bad for our economy?Why is it that Monopolies are considered bad for our economy? How are Monopolies sometimes good for our economy?How are Monopolies sometimes good for our economy? How are American Anti-Trust Laws an example of a mixed-market How are American Anti-Trust Laws an example of a mixed-market

economy?economy? What is an oligolopoly?What is an oligolopoly? What is a conglomerate?What is a conglomerate? What is the differerence b/w a horizontal and vertical merger?What is the differerence b/w a horizontal and vertical merger?

Warm UpWarm Up

Why has the U.S. Gov’t created laws in Why has the U.S. Gov’t created laws in order to prevent monopolies? order to prevent monopolies?

Types of Types of BusinessesBusinesses

Sole ProprietorshipSole Proprietorship

Business owned by a single Business owned by a single personperson Ex: Pizza place, beauty Ex: Pizza place, beauty

salonsalon Easiest form of business to Easiest form of business to

set up. Anyone can start one.set up. Anyone can start one.

AdvantagesAdvantages

Owner receives all Owner receives all the profit & makes all the profit & makes all decisions.decisions.

DisadvantagesDisadvantages

Unlimited LiabilityUnlimited Liability The owner is financially The owner is financially

responsible for all responsible for all problemsproblems

Limited Life Limited Life Function only when the Function only when the

owner doesowner does

Difficult to raise Difficult to raise financial capital financial capital Small Business Small Business

AdministrationAdministration

Partnership & Partnership & CooperativesCooperatives

PartnershipPartnership Business owned by 2 or Business owned by 2 or

more people. more people. Ex: Law firms & Doctors Ex: Law firms & Doctors

officesoffices

CooperativesCooperatives Involves much more Involves much more

people than a typical people than a typical partnershippartnership

Board of Directors Board of Directors elected by owners to elected by owners to oversee companyoversee company

AdvantagesAdvantages

Easier to raise Easier to raise financial capital due financial capital due to multiple ownersto multiple owners

Each owner brings Each owner brings special skills and run special skills and run different parts of different parts of business.business.

DisadvantagesDisadvantages

Difficult to reach Difficult to reach decisions that satisfy decisions that satisfy everyoneeveryone

Difficult to dissolve Difficult to dissolve partnership if it partnership if it breaks apartbreaks apart

Unlimited Liability Unlimited Liability

Corporation Corporation

A business recognized A business recognized by law that has many by law that has many similar rights to an similar rights to an individual.individual. Ex: Own propertyEx: Own property

Owned by Owned by shareholdersshareholders who buy who buy stockstock in the in the company.company.

Shareholders elect a Shareholders elect a Board of Directors to run Board of Directors to run company company

AdvantagesAdvantages

Easy to raise financial capitalEasy to raise financial capital Sells stock & bondsSells stock & bonds

Bonds are a means of Bonds are a means of borrowing money. In borrowing money. In addition to cashing in the addition to cashing in the bond at a later date the bond at a later date the person also collects person also collects interest interest

Limited liabilityLimited liability Owner not responsible for Owner not responsible for

debtsdebts Shareholders can only lose Shareholders can only lose

what they investwhat they invest Unlimited lifeUnlimited life

Ownership can be easily Ownership can be easily transferred.transferred.

DisadvantagesDisadvantages

Business owners Business owners have little say in how have little say in how business runsbusiness runs

Double taxationDouble taxation Corporation is taxed Corporation is taxed

based on profitsbased on profits Shareholders must Shareholders must

pay taxes on any pay taxes on any DividendsDividends or or Capital Capital GainsGains

FranchisesFranchises

Sole Proprietors Sole Proprietors or or Partnerships Partnerships purchase the purchase the rights to a trademarked rights to a trademarked corporationcorporation McDonaldsMcDonalds

AdvantagesAdvantages Name recognition and Name recognition and

support of national support of national corporationcorporation

DisadvantagesDisadvantages Uphold “chain” identity Uphold “chain” identity

and sell only certain and sell only certain productsproducts

What are Labor Unions?What are Labor Unions?

A group of workers A group of workers that unite to get that unite to get better pay and better pay and working conditions. working conditions. Engage in Collective Engage in Collective

BargainingBargaining

What are the Two types of What are the Two types of Unions?Unions?

Craft/Trade UnionsCraft/Trade Unions Workers who have the Workers who have the

same skills.same skills. Ex: Plumbers, Ex: Plumbers,

Teachers, NFLTeachers, NFL Industrial UnionsIndustrial Unions

Workers with different Workers with different skills who make one skills who make one product.product.

Ex: Construction, Car Ex: Construction, Car FactoriesFactories

Labor Union LegislationLabor Union Legislation

Labor Union Relations Act Labor Union Relations Act 19351935 Gave employees the right Gave employees the right

to join unionsto join unions Fair Labor Standards Act Fair Labor Standards Act

19381938 Restricted child labor, Restricted child labor,

granted minimum wage, granted minimum wage, regulated workplace regulated workplace safetysafety

Social Security Act 1935Social Security Act 1935 Provided income to Provided income to

retirees and retirees and unemployment benefitsunemployment benefits

Unfavorable Legislation Unfavorable Legislation

Taft-Hartley Act 1947Taft-Hartley Act 1947 Prohibited Prohibited closed shops closed shops

Workplaces that could Workplaces that could only hire union only hire union membersmembers

Union CriticismUnion Criticism Minimum wageMinimum wage

Leads to increased Leads to increased unemploymentunemployment

Hurt quality Hurt quality Difficult to fire union Difficult to fire union

members for poor members for poor performanceperformance

Labor Management Labor Management ConflictConflict

Let’s say the union workers and the boss Let’s say the union workers and the boss are having problems. The workers want are having problems. The workers want higher wages but the boss refuses to higher wages but the boss refuses to pay. What are the steps are actions they pay. What are the steps are actions they must go through to solve their problem? must go through to solve their problem? At each step the problem can be solved At each step the problem can be solved but if it isn’t the next step is needed.but if it isn’t the next step is needed.

1.1. Collective bargainingCollective bargaining Boss and workers try to Boss and workers try to

come up with an agreement.come up with an agreement.2.2. MediationMediation

Bring in a third party to help Bring in a third party to help create an agreement.create an agreement.

3.3. ArbitrationArbitration Third party makes an Third party makes an

agreement for them.agreement for them.4.4. StrikeStrike

Refuse to work.Refuse to work.LockoutLockout Boss refuses to let workers in Boss refuses to let workers in

building until they accept the building until they accept the terms.terms.

If the problem led to a If the problem led to a strike or lockout most strike or lockout most likely workers will lose likely workers will lose because the boss can because the boss can always get someone always get someone else to do the work. But else to do the work. But sometimes a strike does sometimes a strike does work and the workers work and the workers get what they want.get what they want.

ReflectionReflection Name at least one advantage and disadvantage Name at least one advantage and disadvantage

for each of the following business types:for each of the following business types: Sole proprietorshipSole proprietorship Partnership and cooperativesPartnership and cooperatives CorporationCorporation Franchise Franchise What are two types of labor unions?What are two types of labor unions? Name at least one advantage and one Name at least one advantage and one

disadvantage of labor unions.disadvantage of labor unions.

ActivityActivity ***Your business must be school appropriate! Your business may ***Your business must be school appropriate! Your business may NOTNOT focus on Drugs, Sex, or focus on Drugs, Sex, or

Alcohol***Alcohol*** Instructions: Using your notes and the textbook (p.480-485) Create a poster or pamphlet that Instructions: Using your notes and the textbook (p.480-485) Create a poster or pamphlet that

describes your business. You must include the following criteria. describes your business. You must include the following criteria. Create a name for your businessCreate a name for your business Answer the 3 questions all businesses must answer:Answer the 3 questions all businesses must answer:

What will you produce?What will you produce? How will you produce the product? (How will you make it…assembly line, cottage industry, How will you produce the product? (How will you make it…assembly line, cottage industry,

computers, etc?)computers, etc?) For whom will you produce it? (Who will be your target audience?)For whom will you produce it? (Who will be your target audience?)

How will you use the 4 factors of production?How will you use the 4 factors of production? Identify the 4 factors, give a brief definition, and how you will use each factor in your Identify the 4 factors, give a brief definition, and how you will use each factor in your

businessbusiness For Labor describe a job for each type of labor: White/Blue Collar, Skilled/UnskilledFor Labor describe a job for each type of labor: White/Blue Collar, Skilled/Unskilled

Type of Business: Sole Proprietorship, Partnership, or Corporation Type of Business: Sole Proprietorship, Partnership, or Corporation Explain why you chose the business model. Discuss the advantagesExplain why you chose the business model. Discuss the advantages Explain the challenges you may face ahead. Discuss the disadvantages you will haveExplain the challenges you may face ahead. Discuss the disadvantages you will have

Include pictures that will make your business come aliveInclude pictures that will make your business come alive

Closing?Closing?

Name 1 positive and 1 negative about Name 1 positive and 1 negative about Labor Unions.Labor Unions.